ECONOMYNEXT – Sri Lanka’s National People’s Power is keen to implement the corruption requirements of an International Monetary Fund program, and will negotiate on ways achieve targets, the head of its economic council, Anil Jayantha said.
The NPP wanted an alternative debt sustainability analysis for future discussions with the IMF, Jayantha, a professor at Sri Lanka’s Jayawardenepura university said.
“Actually, we do not want to replace forcefully with the alternative DSA but it is to get good input and information to go the next level of discussion with the IMF at the next review.”
“IMF also had several discussions with us. They showed the willingness to discuss our alternative ways of meeting the targets as long overall objectives are met.”
The NPP also wanted to make Sri Lanka’s debt sustainable and stabilize the macroeconomy and the external sector, he said.
Even a debt to GDP ratio of 95 percent aimed at in the DSA was quite high for the country like Sri Lanka, he said.
The NPP would also like to broadly continue with quantitative targets in the current approved program for 2024, but will negotiate to give reliefs as early as possible.
Income tax relief has already been proposed in its manifesto.
On the macro-linked bonds or governance linked bonds being negotiated with the bondholders, the NPP was not rejecting the model outright but its concern was to keep the interest rates as low as possible, Jayantha said.
“We do not want to get into a debt trap with a bigger burden, but to bring it to a sustainable level and bring down the interest cost.”
Sri Lanka’s interest bill was already too high, he said.
Anti-Corruption Benchmarks
But the NPP wanted to go faster on the corruption structural benchmarks.
“We want to implement the corruption benchmarks very fast. As you know that does not cost any money,” Jayantha said.
‘We have been talking about governance before the IMF. We think it has to be executed properly.
Foreign investors need have no fears about investing in the country, as current concerns over political corruption would be tackled, he said.
The NPP was also keen on faster clearances for land and other permits where there are now bottlenecks.
Both local and foreign investors faced similar problems, he said.
“Of course, investments should be in line with our strategic priorities. We would like to give more preferences for green investments and long-term investments.
“We want to we want to consolidate all different institutions and bring that within an umbrella of one institution which has required powers.”
“And further, we would introduce our own code of conduct and ethics for our MPs until the constitution would be replaced in the future.”
Foreign Trade
Concerns have been raised about a promise in the JVP manifesto to review free trade agreements. Jayantha said.
“When we say revising or revisiting it is seen in a negative connotation,” he said.
“Actually, it is not to scrap those agreements. Sri Lankan exporters have not been able to make use of them in the proper. We have identified bottlenecks in some of these agreements, even with the Indo Lanka Agreement.
“The revisiting or the revising objective is to further facilitate how best international trade can be enhanced on a fair and democratic manner. We are concerned about non-tariff barriers.
“Not only that we have further stated that we are willing to go for new trade agreements. If we really want to have a sizeable amount of foreign trade, it is not that easy for a country like us to encroach on different markets on competition only.
“So, the objective is to create an environment where we could slowly enter into this. We want to help exporters meet the standards.”
Mareva Injunction
There were no plans to confiscated or expropriate private property, he said.
“We do not want to confiscate or acquire private property,” Jayantha said. “If we acquire private property what will the government do with it?”
“We have very clearly stated we are against corruption. If they have earned in a corrupt manner we will take action in legal manner.
“We have thought of introducing Mareva injunction. Our legal team is exploring this.”
These have to be done with international co-operation, he said.
The NPP wanted people to get rich by legal means and was not keen on heavy taxation.
“If you can be rich by earning (legally), it is ok. Actually, we want to have rich people. We say in Sinhala ‘pohosath ratak’.
“It is not only to be rich in money, but in other ways as well, such as in education, health services, in culture, foreign relations and human qualities.”
“We want to reduce taxes in the long term, not immediately. If you look at the Asian region, tax as a percentage of revenue is high about 25 percent, but tax rates are lower.
“That’s obvious evidence that if your tax system is transparent and fair, taxes can be collected easily.
The NPP also had some concerns about the imputed taxes they would discuss with the IMF. Imputed income is not real income, he said.
Individuals will not object to paying taxes, if they are confident of governance, he believes.
Power Shift
This is not simply a shift of power from one party to another.
“The current crisis is a man-made crisis, driven by corrupt politics,” Jayantha said. “There is a malicious and ugly campaign against us.
“Because they know very well that this is not something simply power would be shifted from one party to another party. This is a shifting of power from the crooks to the people who love the country.
“We would create opportunities for everyone to contribute to this process and rebuild the country together.”
The NPP is made up of a national executive committee of 73 members of which he was one. Policy level decisions were taken by this body.
The organizations included the JVP, labour unions and other groups as well as individuals who represented some districts.
There was smaller steering to take quick operational committee, with two members from each group. There were about 40 members in that group.
The information was published on the web.
“And as far as the JVP is concerned, because JVP is the biggest organization which is very visible to the public,” Jayantha said.
“It has a different organizational structure. There is a political bureau and there is another central committee.”
The membership of the political burau and central committee was also published on the web.
“Once the government is formed, there will be a cabinet, which will be limited to 25 ministers,” he said.
The minister would be advised by a committee of professional and experts in the field. It will have a role beyond a simple consultative committee. (Colombo/Aug16/2024)